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Business, Finance, Occupation & Industry

What You Were Selling Last Week: Marks & Spencer Group

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By Jon Wallis, The Motley Fool

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LONDON — One of Warren Buffett‘s famous investing sayings is “be fearful when others are greedy and greedy when others are fearful” — or, in other words, sell when others are buying and buy when they’re selling.

But we might expect Foolish investors to know that, and looking at what Fools have been selling recently might well provide us with some ideas for investments that are past their prime.

So, in this series of articles, we’re going to look at what customers of The Motley Fool ShareDealing Service have been selling in the past week or so, and what might have made them decide to do so.

Share-price spike
The share price of Marks & Spencer  shot up 11% in the course of just a few days in the past fortnight, driven upwards by speculation of an 8 billion pound takeover bid lead by the state-owned Qatari Investment Authority. And a spot of quick profit-taking may have put the company in the No. 2 spot in the latest “Top 10 Sells” list.*

The former mainstay of the British high-street has been struggling in recent years, and its performance in the run-up to Christmas, over the final three months of 2012, was very disappointing. In a trading statement in early January it revealed that its like-for-like sales of clothing and general merchandise had dropped almost 4% and like-for-like food sales were flat (up just 0.3%), resulting in an overall fall in like-for-like sales of 1.8%.

On the brighter side, its multichannel sales — that’s online sales (including via mobile devices), home delivery, and collect-in-store — grew by almost 11%, and international sales increased by just over 4%. With its Chinese website having been launched this year, the company is obviously hoping for even greater growth in the months and years to come.

Even after the recent spike in share price, Marks & Spencer’s forward P/E of 12.2 remains well below the general retail sector average of almost 19. And its forecast yields of 4.3% for 2013 and 4.5% for 2014 should make it an attractive proposition for investors who like to get an above-average income from their shares.

But doing business on the high street has been tougher than ever in recent years, with no real end to the adverse U.K. market conditions in sight. Only recently the Centre for Retail Research forecast a “flat” 2013, and growth of less than 1.5% in 2014, with physical sales suffering as online business continues to expand. The difficult U.K. retail environment may well be why Marks & Spencer’s chief executive Marc Bolland expressed the intent to “transform Marks & Spencer from a traditional U.K. retailer to an international multi-channel retailer” in the January trading statement.

How long that transformation will take — indeed, whether it can be achieved at all — only time will tell. So perhaps some shareholders felt that they should realize a quick return on the back of the takeover speculation, putting Marks & Spencer near the …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

5 FTSE 100 Dates for Your April Diaries

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By Alan Oscroft, The Motley Fool

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LONDON — April will start off quite slowly for company news, but things will pick up around the middle of the month. There will be updates from a good few FTSE 100 companies, and we’ll keep you updated on them as the month progresses. But in advance, here are five of the most important diary dates.

April 11: Marks & Spencer
Marks & Spencer will be bringing us a fourth-quarter update on the 11th, shedding light on how the year to March 31 has gone — full results will be with us on May 21. The share price got a bit of a boost last week to 395 pence on rumors of an 8 billion pound bid in the offing from the Qatari Investment Authority, but other than that the shares have had a pretty lamentable few years.

Forecasts suggest a 7% drop in earnings per share, putting the shares on a price-to-earnings ratio of 12, with a nearly twice-covered dividend yield of 4.3%. With modest earnings and dividend rises penciled in for 2014 and 2015, the P/E would fall to 11 and 10.5, respectively, while the yield would rise to 4.5% and then 4.8%.

April 17: Tesco
Full-year results from Tesco are due on the 17th after what has been quite a tumultuous year. The share price famously slumped in January 2012 after the U.K.’s biggest supermarket reported a weak Christmas trading period. But since about October, the price has been steadily rising, reaching 378 pence today.

And this time around, things looked better over Christmas and New Year, with U.K. like-for-like sales up 1.8%, and the company reported “recovering in-store performance.” Forecasts for the year to Feb. 28 put the shares on a P/E of 12, with a 4% dividend yield.

April 24: GlaxoSmithKline
It’s time for first-quarter figures from GlaxoSmithKline on the 24th. The pharmaceuticals giant reported flat earnings for the year to December 2012 but lifted its total dividend by 5.7% to 74 pence per share for a yield of 5.5%. At the time, chief executive Sir Andrew Witty told us the firm expects 3% to 4% growth in core EPS for 2013, along with “further strong cash generation,” which should support increasing dividends.

Analysts are forecasting a 5.4% boost to this year’s annual payment, which would provide a yield of 5.2% on a share price of 1,506 pence — and that’s significantly above the average FTSE 100 dividend of around 3.1%.

April 24: Barclays
Barclays will also deliver first-quarter results on the 24th, continuing on from a strong performance in 2012, when the high-street bank reported a 24% rise in EPS and the fourth annual dividend raise in a row. After the 2009 payment was slashed to just 2.5 pence per share, it has crept back to 6.5 pence last year, with about 7.25 pence currently forecast for 2013. With the shares currently changing hands for 287 pence, that would be …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should You Buy Marks & Spencer Today?

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By Royston Wild, The Motley Fool

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LONDON — Shares in beleaguered British retailer Marks & Spencer Group have shot higher in recent days, fueled by speculation that the Qatari Investment Authority is concocting an 8 billion pound takeover bid for the shopping chain.

The company has become an enduring casualty of the troubled domestic retail environment, but I am backing the iconic shopping brand’s drive into emerging markets to reinvigorate its fortunes and offset enduring weakness in the U.K. and Western Europe.

International expansion to fuel future growth
The retailer’s January interims revealed that group sales trudged just 0.6% higher in the three months to the end of December, with U.K. revenue edging 0.3% higher during the period. British like-for-like sales dropped 1.8%, meanwhile, and the firm warned of further toughness in the retail environment at home.

To address this ongoing weakness, Marks & Spencer is aiming to boost its operations in countries with strong structural drivers across Asia, the Middle East, and Eastern Europe. For example, it is planning to hike the number of stores in India from 30 to 80 within the next three years, while in China it aims to boost the number of its stores in Hong Kong and Shanghai in the near term.

And the company plans to use a multichannel approach to geographical expansion, including the establishment of franchise stores with strong partners, which will harness both local knowledge and infrastructure to spark growth. Marks & Spencer is also looking to aggressively tap into online trade in these regions, and it launched its local website in China at the start of the year.

Looking good for earnings turnaround
According to broker forecasts, earnings per share are expected to dip 7% to 32 pence in the year ending March 2013 before reverting 7% higher during the following year to 35 pence. And an 8% rise to 37 pence is penciled in for 2015.

Despite the recent share-price ascent, the retailer still trades at a significant discount to the broader retailers sector’s forward earnings multiple of 18.7. Shares in Marks & Spencer currently change hands on a P/E of 12.1 for 2013, and this is anticipated to fall to 11.3 and 10.5, respectively, in 2014 and 2015.

Get used to great dividends
Marks & Spencer’s investment appeal is bolstered by a sound dividend policy. City analysts expect a shareholder payout of 17 pence per share for March 2013 — which would match the dividends of 2011 and 2012 — to rise to 17.8 pence in 2014 and 19 pence in 2015. These payments come with respective yields of 4.8% and 5.1%, besting the mean reading of 3.5% for the U.K.’s 100 largest companies. Further, investors can take comfort in dividend coverage close to the safety threshold of two times: 2014 and 2015 dividends are both covered about 1.9 times.

The canny guide for clever investors
If you already hold shares in Marks & Spencer Group, check out this newly updated …read more
Source: FULL ARTICLE at DailyFinance